The president and first lady shook hands, posed for pictures, admired babies and chatted with Marines and their families in the mess hall decked out in Christmas decorations for about 40 minutes.

"Did you get everything you wanted?" Obama asked one little girl, who brandished a bracelet, prompting the president to point out a presumably new bracelet on Michelle's wrist.

He told one athletic-looking man that he should join Obama's basketball team so the president could avoid getting an "elbow in the lip," a reference to the injury Obama suffered during a Thanksgiving game.

The Obamas and daughters Malia and Sasha are staying at a luxurious oceanfront home in Kailua. The first family celebrated Christmas with a small circle of friends and family, including some of Obama's childhood friends and the president's sister, Maya Soetoro-Ng, who lives here on Oahu, the island where Obama was born and spent much of his childhood.

The Obamas dined on steak, roasted potatoes, green beans and pie, and the sports-obsessed president got a chance to relax and watch some NBA basketball.

Besides the Marines base, Obama's excursions in Hawaii have been limited to the gym, golf course, and a Christmas Eve trip to the beach with his daughters.

Mrs. Obama skipped the beach so she could give some lucky children a Christmas surprise. The first lady answered calls for the "Tracking Santa" program, a Christmas tradition run by the North American Aerospace Defense Command (NORAD). With help from NORAD's Santa Route Schedule, Mrs. Obama was able to tell children Santa's whereabouts as he made his Christmas Eve rounds.

Last year Obama was with his family in the same oceanfront neighborhood when a 23-year-old Nigerian man allegedly attempted to blow up a plane bound for Detroit. The incident raised questions about the nation's terror readiness and consumed the rest of Obama's vacation.

In his weekly radio and Internet address, the president encouraged Americans to find ways to support U.S. service members, many of whom are spending the holidays away from their families.

Philip Seymour Hoffman withdrew a total of $1,200 from an ATM at a supermarket near his New York City apartment the night before he was found lifeless in his bathroom with a syringe still in his left arm, sources told NBC News.

"Let's all remind them this holiday season that we're thinking of them, and that America will forever be here for them, just as they've been there for us," Obama said.

The first lady, who has made working with military families one of her top priorities as first lady, said Americans don't need to be experts in military life in order to give back to those who serve their country. She urged the public to reach out through their schools and churches, or volunteer with organizations that support military families.

"Anybody can send a care package or pre-paid calling card to the front lines, or give what's sometimes the most important gift of all: simply saying thank you," Mrs. Obama said.

The first family has no public events planned during their vacation. The president, though, is receiving daily briefings, beginning work on January's State of the Union address, and evaluating a staff review headed by interim chief of staff Pete Rouse.

Obama arrived in Hawaii on a high note, having secured victories on legislative priorities: ratification of a nuclear arms treaty with Russia and the repeal of the military's ban on gay service members. He also compromised with Republicans to extend tax cuts for all income earners, a deal that angered some liberals but won him rare bipartisan support.

Awaiting Obama in 2011 is an economy still struggling to achieve steady growth, a divided Congress and a host of Republicans ready to run for his job in the 2012 election.